Very interesting stuff Joe!
Yeah, I’ll be going back to datastream in a few days time and I’ll get data on the profit shares of US-listed food processors and food retailers. I figured that it would be more appropriate given the fact that the prices indexes relate to the U.S. food market.
Anyhow, your thesis that Wal-Mart et al.’s squeezing of the farming sector has reached some kind of limit seems to be corroborated by an index that tracks the “farm-share of the US food dollar”. It was set up in the 1950s after the US congress passed an act to measure the costs of marketing agricultural products in their various forms. In rough terms it quantifies how many cents in the average dollar spent on food goes to the farmer and how many cents goes to post-farming processes in the supply chain. The below graph shows how the ratio has changed over the last fifty years:
One issue with the data is that the way in which the US food dollar is calculated changed and the new index only goes back to 1993. As such the drop in the farm-share of the US food dollar in the early 1990s is probably a bit exaggerated by the graph. However, if we just focus on the new index we can see again that the squeezing of farmers reached some kind of limit at the turn of the millennium:
Finally, all of this seems to cohere with my finding that the dominant food traders benefited most in the last ten years, particularly at the points of acute agflation (agricultural commodity price inflation). This is presented in the first graph in my post on the new global food crisis - viewtopic.php?f=12&t=279
. The food traders that I analyzed - Archer Daniels Midland, Bunge and Cargill – dominate the processing of various foodstuffs. It seems that they’re progressively more able to pass on the increasing cost of raw agricultural goods onto those at the end of the food chain, while exacting a nice mark-up to boot. This is all very exciting because it shows as Nitzan and Bichler theorize, that inflation is the outcome of redistributive struggles fought between various capitalist entities.
All the best,